Rising home prices in the Twin Cities are affecting more than those buying or selling their homes. The current favorable market and consistent upward pressure on home prices have both played a hand in home valuation increases across the metro, an annual practice impacting all home and property owners. However, it's likely that Minneapolis homeowners are experiencing the most extreme changes to valuations, at least as indicated by the number of appeals filed with the city. The details of the situation were reported in the Star Tribune's April article "Minneapolis property owners challenge their real estate taxes".
The article states that almost 1,400 property owners have filed appeals to their market-price assessment performed by the city, which of course plays a major role in the amount of property taxes paid each year. 1,386 is the exact number of appeals filed in 2018; compare that to 756, 870, 739 – the number of appeals filed in Minneapolis over the last 3 years - and it's clear that people mobilized to encourage neighbors to file appeals. The few individual cases shared in the article are astounding – fixed-income retirees who are being priced out of their own homes due to unexpectedly fast-rising property taxes and home values increasing $50,000+ in one year. As a whole, the city of Minneapolis' real estate has grown an incredible 45% in estimated value since 2014, as stated in the article. That increase in value is not only causing homeowners on a fixed income to panic but is also contributing to rising rents across the city, and general unaffordability for many.
High rental rates have become norm in the Twin Cities metro over the past several years because the demand has been so high and vacancies persistently low. All of the recent construction may help to alleviate some of the upward pressure due to low supply, but as long as property owners' costs continue to rise, so will rents. In this case, rising property values and therefore property taxes are a cost that owners would pass on to tenants with increased rents. Adequate affordable housing is an issue that the Twin Cities needs to tackle as soon as possible. At the same time, home buyers also need honest and prudent counsel on the front-end so as not to overextend themselves - especially while understanding the possibility of home value and property tax increases!
Cover Photo By Akerx019 - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=23548424